2006 Archive

You've heard it time and again that an IT talent shortage in the U.S. is pending. Well the pending is over and the shortage is here according to a senior government official. Robert Cresanti, the U.S. undersecretary of commerce for technology, told eWEEK that "The IT work force is not skilled enough and almost never can be skilled enough."

The world knows that India is the current talent hotbed. With the largest population of workers in the world, a strong educational system and skilled professionals across a diverse range of industries, India is, not surprisingly, the top spot for outsourcing and offshoring. It is also a prime hunting ground for many global businesses seeking senior-level business talent.

In this blog, I am always eager to discuss Vietnam and its booming technology industry. With software development centers across Vietnam, Harvey Nash knows firsthand how rapidly this country is becoming a valuable contributor to the global technology marketplace. The WTO just last week economized Vietnam's increasing influence in the global economy and community, making the country its 150th member. Bill Gates visited Vietnam this year and now another tremendously high-profile American is stopping by. President George Bush, during his eight-day Asia tour will visit Vietnam and attend the Pacific Rim summit in Vietnam.

India has been the dominant outsourcing hub for the West for a decade now. But where does Asia outsource to? Technology powerhouse Japan is looking around its high-tech neighborhood and, rather than diving into the high-cost Chinese marketplace, is begin to send more and more offshore development to Vietnam.

For years many have assumed offshoring leaders like India had enough talent to manage the entire global marketplace's IT needs. The truth is quickly emerging that while India does have extremely skilled IT talent, their numbers are limited.

Late this month, a great outsourcing article from Bill Fowler of Compass America came out on CIO.com (CIO Magazine's Web site). Called "Is Insourcing the Next Outsourcing," this piece offers some valuable marketplace insights as to why so many businesses are considering repatriating IT services that they currently offshore. Why the insourcing push?

I recently read the article "A Good Offense Is a Good Defense" by Susan Cramm at CIO Magazine's Web site. I found it a good read, full of good advice. In addition, it reminded me that even now, in 2006, we still have IT departments (sometimes even CIOs) that are not receptive to outsourcing.

When I first read the article, "Outsourcing Windows: What you can expect" on ComputerWeekly.com, I said, "Finally someone is highlighting some of the many positives to IT offshoring." The article explains how offshoring gives you access to different levels of expertise, assists businesses in resolving complex issues and increases the level of productivity within an IT environment.

I was glad to read this week on Baselinemag.com that I am not the only IT professional shaking my head at the latest round of studies predicting that outsourcing is on the decline. In the article "Outsourcing: What CIOs Need to Know," Laton McCartney interviews Scott Holland, senior business advisor for The Hackett Group, who like me, every day sees strong growth in the BPO market.

2006 has seen many businesses swiftly sail offshore help desk solutions right back on shore. Powergen, the UK utility company, cited rising wages when it withdrew from a contract with call center operator Vertex Data Science this spring. In addition, Apple Computer Inc. announced this June that it is pulling back from plans to establish a customer support facility in Bangalore, India. Wages and the growing cost of business have been speculated as key reasons for the move with Apple spokesperson Steve Dowling said commenting, "We have decided to set up our planned support-center growth in other countries."

In a recent meeting with a senior executive at one of our clients in Denver, a question came up when we were discussing offshoring and selecting locations. Are we looking at the world wrong? His question and our subsequent discussion prompted me to write this blog entry.

It’s not unusual for a business that outsources solutions to offshore locations to experience cultural mix-ups and confusion. As the recent article “Outsourcing stunted by cross-cultural misunderstandings” posted on ihotdesk.com points out, most businesses that offshore experience “miscommunication issues within their outsourcing operations.”

While many industry experts point to a lack of cross-cultural training and inconsistent methodologies for the high rates of confusion and mix-ups, I believe a large part of the solution to offshore success lies in two critical operational musts: